California and Colorado SaaS Sales Tax Changes: What Software Companies Need to Know
California and Colorado will begin taxing many SaaS transactions on January 1, 2027. Software companies should start evaluating the sales tax implications now.
Question 8 asks Massachusetts voters to weigh a proposal that would eliminate the Commonwealth’s adult-use cannabis market, making it important for businesses, consumers, and industry stakeholders to understand what would actually change.
Question 8 would present one of the most significant proposed changes to Massachusetts cannabis policy since adult-use sales began. The initiative, titled An Act to Restore a Sensible Marijuana Policy, asks voters to consider a proposal with practical implications that may not be immediately apparent from the ballot language alone.
If approved, the measure would eliminate Massachusetts’ adult-use cannabis market and transition the state to a medical-only framework. Additional restrictions on home cultivation would also take effect. A “No” vote would preserve the current structure, including the regulated adult-use market that exists today.
The distinction carries significant implications for businesses operating throughout the cannabis ecosystem. Adult-use cannabis sales reached approximately $1.65 billion in Massachusetts during 2025, supporting cultivators, manufacturers, retailers, testing laboratories, ancillary service providers, employees, and municipalities that receive revenue generated through the regulated market. State leadership has publicly described the cannabis industry as an important contributor to the Massachusetts economy, citing its role in supporting jobs, local businesses, and tax revenue that helps fund programs and services across the Commonwealth. The proposal therefore raises questions that extend well beyond cannabis policy. Businesses that invested under the current regulatory framework could face significant operational uncertainty, municipalities could see changes in revenue streams generated by regulated cannabis sales, and employers throughout the industry may need to reassess staffing, expansion, and long-term investment plans.
Industry stakeholders have also raised questions about how consumer purchasing behavior might change if licensed adult-use sales were no longer available. While future outcomes are difficult to predict, discussions frequently focus on whether demand would shift entirely into the medical market or whether a portion of purchases could occur outside the regulated system, where testing, labeling, and other consumer protections may differ or do not exist.
Before evaluating the arguments being made by either supporters or opponents of Question 8, it is important to understand what the proposal would do in practical terms. For cannabis operators and stakeholders across Massachusetts, the details matter.
If approved, Question 8 would eliminate adult-use cannabis sales in Massachusetts and transition the Commonwealth to a medical-only framework. While that distinction may sound technical, the change would affect far more than retail dispensaries. Although the proposal directly affects cannabis businesses, its effects could extend to commercial landlords, professional service providers, vendors, municipalities, and others whose organizations participate in or benefit from the regulated cannabis economy.
Whether viewed through the lens of economic activity, business operations, consumer access, or regulatory oversight, the proposal would represent a significant policy shift for an industry that has become an established part of the Massachusetts economy. For that reason alone, AAFCPAs stands with its clients in opposition to these proposed changes. Cannabis operators and other stakeholders may benefit from reviewing the details closely and evaluating the potential consequences based on the facts available to them.
Since 2012, AAFCPAs has been immersed in the cannabis industry, advising businesses, investors, and stakeholders as regulations, markets, and operating environments have evolved across the United States. Our team closely monitors legislative, regulatory, tax, and business developments affecting the industry and regularly participates in national discussions shaping its future. From federal policy changes and IRC Section 280E developments to state-level regulatory initiatives such as Question 8, we help industry participants understand the potential implications of significant developments and make informed decisions in a rapidly changing environment.
These insights were contributed by David McManus, CPA, CGMA, Tax Partner & National Cannabis Practice Leader, Joshua England, LLM, Esq., Partner & Tax Attorney, and David J. Gravel, CPA, MPAc, Tax Director.
Questions? Reach out to our authors directly or your AAFCPAs partner.
AAFCPAs offers a wealth of resources on cannabis tax and advisory. Subscribe to get alerts and insights in your inbox.
California and Colorado will begin taxing many SaaS transactions on January 1, 2027. Software companies should start evaluating the sales tax implications now.
The systems and processes that helped your organization reach one stage of success are not always the ones that support the next.
Beginning in 2026, eligible Massachusetts pass-through entities can elect the new Chapter 63E PTE excise. Business owners subject to the state's surtax should understand how...